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INTERIM REPORT – OSCE Office for Democratic Institutions and Human Rights Election Observation Mission Georgia

Published: September 25, 2012 | 10:15 pm
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Campaign Finance (Extract)- OSCE Office for Democratic Institutions and Human Rights Election Observation Mission Georgia.  Parliamentary Elections, 1 October 2012 INTERIM REPORT No. 2   6– 19 September 2012.  Released on 24 September 2012.

From 1 January to 9 August, disclosed donations to all party and bloc funds totalled GEL  19,216,936. Some 748 donors contributed GEL 16,659,586 to UNM whereas 969 donors  contributed GEL 2,400,257 to the parties forming the GD bloc. UNM received the maximum  allowable individual donation of GEL 60,000 from 89 donors; GD, from only two donors.

The SAO stated to the OSCE/ODIHR EOM that they run crosschecks of donor information with the state database of people receiving social assistance and the database of real estate property.  The SAO also requests donors’ tax records from the state tax authority, the Revenue Service, where they deem further investigation is necessary. If a donor has not declared income over the past two years, the SAO refers the case to the courts. In some 35 cases examined in detail by the OSCE/ODIHR EOM, the courts have deemed the donations by such individuals illegal on the grounds that ‘the donor failed to prove the origins of the property donated’. Whereas citizens are legally obliged to declare income and pay taxes, the Law on Public Unions of Citizens does not require this for donations to be legal. The SAO has also not concluded any Memorandum of Understanding with the Revenue Service, as required by its regulations, to establish procedures for cross-checking tax documents.

Legislation grants the SAO and the courts wide discretion in determining whether a donation is   ‘justifiable’ as well as broad authority to make inquiries. At times, donors do not receive sufficient explanation as to why they are being fined when they had sufficient income from previous years to make the donation, though in some cases donors did not declare any income in the last two years. The fact that some SAO senior officials are standing as UNM candidates undermines perceptions of the body’s impartiality and independence.

The SAO investigated over 100 GD donors, including a contribution of GEL 100 and one inkind contribution amounting to GEL Some 68 GD donors were fined by the courts. The SAO investigated 10 UNM donors, of which 8 were fined. All donors were levied fines equal to five times the donation. The UNM explained the limited number of UNM donors being fined by their policy to advice donors in advance on the size of their donations based on their tax declarations.

The SAO and the courts reviewed the vast majority of cases of illegal donations before the SAO adopted its internal regulations in July 2012. The Ombudsperson reported that individuals investigated as potentially illegal donors were summoned without being informed about their status as witnesses or suspects. They were body searched, deprived of personal belongings during lengthy interviews conducted in a manner that did not indicate due process.

The Ombudsperson reported that lawyers were not fully allowed to exercise their duties and income  data of donors was made public without their consent.

According to the National Bureau for Enforcement (NBE), since 8 May, immovable property of   illegal donors was seized in 34 cases and in 27 cases subsequently auctioned off. In five cases, the auctioned property was the only accommodation of the donor. Movable property, mostly vehicles, was seized in 35 cases and subsequently auctioned off in 25 cases. Bank accounts of 75 individuals and 5 legal entities were seized. A non-binding IAC recommendation suspended the enforcement of seizures of immovable property thereby also suspending evictions. After consulting the SAO as a creditor, the NBE lifted the seizure of the bank account of the six  parties forming the GD bloc and an affiliated NGO, thereby suspending the enforcement of a Tbilisi City Court decision of 27 June that fined GD with GEL 2,850,717.

On September 4, President Saakashvili initiated an amendment to Article 57.6 of the Election Code that replaces deregistration with a fine in the event that an electoral subject fails to submit a campaign finance report on time. To date, the parliament has not yet adopted the amendment.


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